M Kalyana Krishna

Roll No. 32128

HR I

Review of Performance Management System

 From my limited knowledge of the Performance Management
System, I feel that the Performance Management System of the
case provided is quite comprehensive and covers all the
important issues that need to be addressed.

Still, I can raise a few issues that I think can be relevant to

the context though I am not sure of the practicality of all the
issues.

1. Second Appraiser: It is mentioned in the case that the

appraisal will be done by two persons, one of them being
the direct supervisor of the employee and the other from
senior management. There can be more clarity with
respect to the second appraiser. A person who is more
directly connected to the employee’s work as a second
appraiser will do more justice to the job.
2. Bi-monthly/Quarterly: It is mentioned in the case that
there will be a Bi-monthly review of the goals and
performance of the employees. But the form given at the
end of the case for KRAs and goals speaks about the
Quarterly period. The form has to be on a bi-monthly
basis.
3. List of Competencies: There is a mention of a list of 14
competencies in the case out of which a maximum of 3
will be applicable to each grade. But there is no mention
of the various competencies anywhere. Is this left for the
organisation to make or can we understand a little more
about the business and suggest a few competencies
ourselves.
4. Dates for Goal Setting and Performance Appraisal: April 5
is the date for setting goals at the individual level and
April 20 is the date for finishing the appraisal. Without
appraising and without having a complete knowledge of
whether the employees are able to live up to the goals
and expectations of the earlier set goals and objectives,
 how prudent is it to set new goals and performance
objectives for the employees.
5. Weightage for Competencies: 15% is the weightage given
for competencies for all grades of employees. Does this
have to remain the same or should the weightage for
competencies for higher grades of employees go up as the
achievement of goals at higher levels is dependent on
various factors that affect the performance of the
organisation as a whole
6. Too frequent reviews: Bi-monthly reviews that are
mentioned in the case require a lot of time and planning.
There are chances that it might become a cumbersome
process and take away a lot of time from managers who
will have to sit through the process of many employees
working under them. As a result, the process might
become lax.
7. Opinions of Stakeholders: An ideal performance
management system should take into account the
opinions of various stakeholders including the customers.
Here, no mechanism has been provided for the external
stakeholders to have a say in the performance
management or in the performance appraisal. Coming to
Performance Appraisal specifically, only the two people
from management are allowed. No scope for peers,
subordinates or customers has been provided to
participate in the performance appraisal.
8. Incentive for Performing well in the Bi-monthly Review: In
the case, the bi-monthly review is a quite neutral process
which has no bearing on anything else except the
performance. This is considered to be a correct thing to
do, but then for the employees at the lower grade, some
sort of recognition/reward will be quite useful considering
the efforts that go into the process.
9. Effect of Performance Appraisal Scores on the Salary
Reviews: Though the purpose of the performance
appraisal is to improve the performance and that there
should be a separate Review for salaries, there should be
 some linkage in some form or the other and atleast to
some extent, between the scores of performance
appraisal and the Salary. In addition to being fair, it is also
a sensible thing to do.
10. Tools for Performance Appraisal: The case does not
mention anything about the tools that should be used for
the performance appraisal. It might lead to a lot of
confusion and the wrong tools being used for the purpose.
Considering the various grades of employees present in
the organisation, specific tools should be provided for
appraising the performance of employees at various
grades. It will make the whole PMS much more effective.
11. HR Participation: In the case mentioned, HR department
only sits in the process of performance appraisal. It
doesn’t have any say in the appraisal of the employee.
Even in the Personal Development Plan, the HR doesn’t
have any say and the whole thing is planned by the
immediate superior of the employee. Only the copy of the
plan is sent to the HR department. I feel that the HR
department should be more actively involved in the
process of both appraisal and in the preparation of
personal development plan.

Having spoken about all the issues above, I should also

say that I find a few provisions quite satisfactory. They
are:
1. Employee Participation in the preparation of his goals
2. Employee participation in the personal development
plan
3. Employees being given enough time to think over their
performance before being appraised
4. Not allowing employees with less than 6 months of
experience to participate in the process
5. Keeping a limit on the number of goals(5) and the
number of competencies(3) to be achieved. It helps in
maintaining focus
6. Assigning different weightages to the goals set based
on their importance and significance